Strategic Management in JD Sports PLC

This report covers the functions of strategic management implemented in JD Sports PLC, including company background, competitor analysis, and strategic recommendations. It discusses the challenges faced by JD Sports PLC and analyzes the external factors using PESTLE analysis. The report also explores Porter's five forces and VRIO analysis to understand the competitive landscape and resources of the company. Find study material and solved assignments on Desklib.

INDIVIDUAL STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Company background......................................................................................................................3
MAIN BODY..................................................................................................................................4
TASK...............................................................................................................................................4
PESTLE.......................................................................................................................................4
Porter’s five forces.......................................................................................................................6
VRIO............................................................................................................................................7
2. Analysing and evaluating organizations competitive strategies..............................................9
Strategic recommendations for JD sports PLC to strengthen its existing position....................11
Strategic direction......................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management is totally concerned for recognition and description of the plans that
are carried in organizations for acquiring competitive advantages and great performances. It is a
bunch of actions and decisions that are undertaken by a manager that decides the outcome of the
organization’s performance. This report covers all the functions of strategic management which
are implemented in the chosen organization that is JD sports PLC. The report describes the
background of the company including tools and frameworks that are utilized to analyse the rival
environment. Recognition of competitor’s strategies to understand the impact of competition and
recommendations to strengthen JD sports PLC current position and provide directions to
implement and formulate plans based on the market analyses is also described in this report.
Company background
John Wardle and David Makin founded JD sports fashion PLC first store in Bury city of
Grand Manchester in 1981. It is the leading retailer of fashionable brands online and in store and
has its own brand (RAZIF, 2018). It also deals with casual wear of such famous global brands.
Its primary store was launched in Oxford Street in 1989 and later registered in the market of
London stock exchange. Organization obtained French retailer of sports called Chausport and
entered into Europe and dominated in most of the European countries. Organization launched
around 56 stores by 2011. JD was bought up by Pentland group and was considered as the most
innovative retailer of branded footwear. It is FTSE 100 index constituent. JD has growing its
business internationally and looking forward to expand specially in Asian countries.
Key challenges faced by JD sports PLC
In spite of innumerable challenges facing mortar and bricks retailing it continued upgrade
constant earnings and deliver services. The volume of buyers was reduced and organization’s
sales were slowed down to 2% in the period of 10 weeks and recognised the maximized strong
comparative challenges. It has faced current economic issues and fiscal threats to the
expenditures of consumers. Company has stood out in the downturn of economics among its
struggling competitors. In the middle of huge retail malaise, it somehow to thrive in between the
premium rivals by offering various different offers to the consumers.
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MAIN BODY
TASK
PESTLE
There are number of challenges as well as opportunities arises in business because of
different types of external factors such as political stability of country, economical reforms,
social behaviour of customers, technological advancement etc. and hence it become important
for firm to analyse it carefully before planning to expand market in different part of world.JD
sports Plc is one of well known retail brand in United Kingdom and mainly focuses on sports
attire, expanded market in European as well as planning for Asian countries (ROZENFELD,
2017 SUC) Such as Vietnam is known as one of the most populous nation within the world and
at the same time aims to become one of the developed country as soon as possible.
Political
Political stability in United Kingdom support industrial growth as policies remain same
and hence organisation can work accordingly. Government of country focuses on growth of
every sector and try to support local firms such as JD sports. However, there are many challenges
which arise because of BREXIT. Most of Raw material of JD sports comes from European
countries but because of Britain’s exit from European Union leads to new tariff which effected
firm’s price strategy. Organisation is planning in expanding business in Asian countries but most
of customers do not welcomes foreign brands as well as UK have some political issue with few
nations in Asia such as Vietnam in Human Rights Watch has very poor records. Freedom of
association and expression as well as peaceful public assembly are restricted strictly. Vietnam
has communist party that controls the nation's journalist, media and several topics of criticizing
the government. Thus its challenging for JD sports to extend their market within Vietnam.
Economical
Britain economically strong and even ranked in top 10 which support industrialisation
and growth of various businesses in country. Increase inflation rate because of BREXIT and
COVID pandemic effected JD sport’s competitive price strategy from which organisation able to
attract customers as well increase market share in time of globalization (Dibia, 2019). Number of
Unemployment continuously increasing in nation because of Britain’s exit from European Union
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and on the other hand pandemic lockdown break bone of various businesses which decrease
purchasing capacity of JD sport’s buyer’s and hence decrease profit share of organisation. Border
tariff increases because of BREXIT which affected which affected raw material from European
countries. Vietnam has the 46 largest economy within the World as it has the Standard Corporate
Income Tax rate which is 20 % as the tax rate varies from 32% to 50 % for several firms who
are readily operates within Vietnam so it is means that Vietnam is stable economically and quite
beneficial for JD in terms of their operation .
Social
In Britain JD sport able to full-fill demand of consumers as per the taste and trend which
increase profit share of business and hence able to maintain its position. Firm highly focuses on
fast sports fashion and provides exclusive product which can easily attract customers in United
Kingdom. The countries like Vietnam has round 97 millions population within the year 2020.
Also Vietnamese is major speaking language and Buddhism is the major religion within the
nation. The life expectancy for women is 81 years while for men is 93 years. There is emerging
growth of the middle class population within the nations as well as expected to reach 27% by the
year 2026. People in Vietnam is also very friendly and several tourist have shared their online
interesting as well as memorable encounter with the local peoples. Thus, there is loss of the JD
group to invest within the nations like Vietnam as here more number of the old age people are
there and hence there is no use of sports fashion for them.
Technological
Britain’s technology is advance in world which supports industrial as well different retail
expansion in country. It also increase efficiency, quality and productivity of work and hence firm
able to gain competitive advantage in changing business. JD sports highly focuses in latest
machine as well system introduce in business and hence remain technological advance in country
(Littlechild, 2016). However, for such types of changes required talented and skilled workforce
which firm can face difficult in Asian markets as employees there are still stuck to traditional
method and not willing to changes. In Asia people think technology as a way of taking resource
as well as work. Organisation can also face challenge while working with old methods of
working. Firm has effective supply chain management because of strong infrastructure facilities
where in Asian countries are under developing condition and hence cannot trading cannot be
easy in the market of the continent. Vietnam has the eight largest provider of IT services within
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the world. However, firm can attract large number of customer by using advance technological
mediums such as artificial intelligence,Fintech, artificial intelligence, education technology,
software outsourcing and many more. However several firms are shifting their manufacturing
operations to the Vietnam and hence JD may faces a fierce battle for the skilled labour.
Environmental
COVID pandemic has taught lesson to world that it’s time to conserve environment
otherwise number of disease can be generated and vanish various industries such as it highly
effected tourism, Sports etc. JD is one of foremost company in United Kingdom which support
conservation of environment as well as sustainable product development (Blackley, Resnick and
Cassidy, 2017). Organisation provide large amount of funds for CSR policies which can helps in
gaining customers and increase profit share. It also started green campaign in which various part
of UK trees planted by employees and hence send a strong message that they believes in
conserving environment. Firm also ban plastic use for carry bags or other purpose and it increase
good-will of firm. It will follow same strategy in Asian countries like Vietnam while expanding
business. The attitude of the people in Vietnam towards the use of eco friendly products is very
positive and hence firm can takes this an opportunity in order to win the trust of stakeholder.
Firm also focuses and prioritising on marketing the eco friendly nature of products.
Legal
Firm has adopted various legal policies for stakeholders and hence able to gain their
confidence in changing business. It also analysing various key litigation of Asian market so that
they able to promote diverse culture in various countries and expand business. Foreign Firms like
JD are permitted to operate within Vietnam that can be also encouraged through government.
Here CONSUMER PROTECTION LAWS such as data protection has becomes one of the vital
issues due to the costumer security and privacy concerns as JD Sports-fashion Plc requires to
study data protection regulation in order to secure the consumer data and hence firm must
consider such factor within Vietnam.
Porter’s five forces
Porter’s five forces help in analysing competitiveness in the changing business
environment so that firm will be able to implement proper strategy and increase market share in
changing business. Competitive or power of different people can be identified by 5 factors as
listed below.
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Competitive Rivalry
JD has number of rivals in country such as Rebook, Foot locker etc. and hence
competition is high which can highly affected its business. Rivalry leads to price war which
highly effecting business of firm and decreasing its profit share in changing business. Everyone
has making various changes in product as well as services so that large number of JD’s customer
can break and others also attract towards them (Goworek and et.al., 2018). Firm is planning to
expand market in Asia such as Vietnam but there are number of companies which sells already
sports clothes and it can become difficult for JD group to expand business and increase market
share in time of globalization. However, JD gtoup focuses on innovation and creativity which
can highly profitable in overcoming from these challenges. The competitive rivalry is low as
there are no sports equipment firms are there in Vietnam.
Supplier Power
Organisation has number of supplier in United Kingdom from Europe as well as Asia
which can help in expanding business and hence power in low (Nash, 2019). There are number
of tariff introduce by British government after BREXIT which can highly effect firm’s business
and can affect its business competitive price strategy. However, expanding business in Asia
especially in Vietnam can highly profitable for firm as number of suppliers are available which
can help in breaking price of raw material and follow competitive price strategy. JD group also
experimenting with the design of their sports items by using several materials so that if the prices
go up JD group easily shift to other company for their raw material. The power of supplier is
high in Vietnam.
Buyer’s Power
Organisation has a good reputation in United Kingdom as well as fame in different part
of Asian countries because of attractive sport clothes as well as accessories and hence buyer’s
power is low because of less option available in other firm. However, changing taste and trend of
customer can affect business of firm as people in UK have different taste as compare to Asian
countries so JD gtoup has to remain alert for any upcoming fast-fashion which can attract
customers. In Vietnam Firm also build a large base of consumers that will be helpful within two
ways. It will decrease the bargaining power of the buyer and at the same time gives an
opportunity to the organisation to streamline its production and sales process.
Threat of Substitution
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British customers welcome new taste & trend and highly fashionable as well as
increasing number of fast-fashion product & services can create number of challenges for firm
and hence threat of substitution for JD sports are moderate. JD in Vietnam has to prepare to
tackle alternative product of competitor’s strategy in effective so that it will not lose market
position. It has to make product in such as way that it can support sustainable product. Also
understand the core requirements of the Vietnamese instead of what they are buying. The threat
of substitution is high in Vietnam.
Threat of New Entry
Increase number of entrepreneur becomes a major issue for firm as well as it effecting
business OF JD sports and hence Power of new entrants is high. People also welcome new
product in UK as well as Asian market which can hampered growth of organisation.
However, organisation highly invests in fast fashion as well as innovation & creativity which
can help in tackling this problem and expand in international market. JD in Vietnam can tackle
such things by innovative new products as well as services that not only provides new consumers
but also provides old consumers a reason to buy items. The threat of new entry is low in
Vietnam.
VRIO
It is strategic tool that are used by JD sports for uncovering resources as well as protect
that and capabilities that helps organisation in gaining competitive advantage in changing
business in time of globalise business. It has focus on four elements of firms namely value,
rarity, inimitable and organized which helps JD sports in gaining competitive advantage as well
as support sustainable development of business in different part of Globe.
Value
JD sports focuses on innovation and creativity which helps in changing taste and trend of
British as we as other countries buyer’s. Advance technology increase efficiency, quality and
productivity of work. It takes feedback, suggestion and opinion from employees regarding
product & quality of services which increase good will have firm as well as able to make quick
changes in process and hence able to gain competitive advantage. Firm also has effective supply
chain management which again enhance customer experience as product as well as delivering
services on time. Firm use number of promotion channels which help in influencing buyer’s by
various professional social media marketers.
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Rarity:
Continuous innovation and creativity become one of the major advantage in growth of
there are very limited organizations which are focusing on it and hence it helps firm in gaining
competitive advantage in changing business. Technological advancement again help firm in
again increase efficiency as well quality & productivity while other firm invest very less in it.
Stakeholders involvement in decision-making again support firm in globalizing business in
different part of world such as in Asian, European countries..
Imitability:
Because of fast fashion and unique product offering of firms helps in influencing
customers and there are very substitutes of firm which can add same value. Organization
different and quality addition of product as well services easily influence customers and increase
market position of JD sports. Organisation is focusing on developing goods which are
distinguishing in nature and support growth of firm.
Organization
JD sports is one of biggest sports retail firm in United Kingdom and have abilities to
expand business in different part of Globe. Management of organisation is highly effective which
help in tackling any type of upcoming challenges as well as opportunities (Aldous and Soares,
2020). Diverse workforce again contributes in growth of firm as well as support innovation &
creativity.
2. Analysing and evaluating organizations competitive strategies
Porter’s generic strategy model is utilized to identify, classify behaviour of company and
gain competitive advantages that are: Strategy of cost leadership, differentiation, and focus.
Later, the focus strategy was divided into two partitions cost focus and differentiation focus.
Cost focus highlights minimization of cost whereas differentiation focuses on accompanying
strategic differentiation in a concentrated market. These benefits combine with scope of activities
to obtain more than standard performance (Kumar and Pansari, 2016).
JD sports PLC has to implement these strategies because it is looking further to expand in Asian
country that is Vietnam.
Cost leadership
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It is all about reducing the cost of goods and services that will be delivered in the new
markets of Vietnam. In JD, this strategy has to be exhibited to become the low cost retailer in the
industry (Islami, Mustafa and Latkovikj, 2020). Sources of cost benefit are separate and hanged
on the formation and complexity of the industry. JD has to ensure that its economy scale is
maintainable, maximize its profits by decreasing prices while charging average cost according to
the business. JD can apply this route only if it has high capital required to make investment in the
technologies that can bring prices down (Kurt and Zehir, 2016). The company has to review its
innovations and technologies that can minimize its processes, its speed and efficiency to assure
profitability in the expanded country. Cost leadership strategy is the process that supports
organization to maximize its shares in the market by reduction of cost and convert into
competitive business and balance shareholder value.
Cost differentiation
This strategy makes the products of JD sports PLC unique and attractive from other
competitor’s provisions. It totally depends on the actual nature of products and industry as well.
It typically includes the image of brand, functionality, features, support and durability that
consumers of JD value. To make cost differentiation strategy successful, JD requires proper
research, innovative ideas and developments in its business (Semuel, Siagian. and Octavia,
2017). The company needs efficient capability of delivering and catering high quality goods in
the expanded industry of Vietnam. JD necessitates effective marketing and sales so that the
Asian market better understand the advantages provided by the differentiation strategy offerings.
The company must need to continue agile with its process of new product development (Kharub,
Mor and Sharma, 2019). If not, the risk of rivals attack may increase who pursue focus on this
plan in the different segments of market. JD sports PLC has to review its skills of management
team like their open minded outward thinking, creativity and expertise’s of markets which are
necessities attributes to make it unique. This strategy open up JD to risks so, it has to make sure
that is revenue is safe and protected and it will not get distracted from its path.
Focus
JD has to use this strategy for concentrating on specific niche markets, recognize the
dynamics and special requirements of customers in the diversified markets of Asia. It has to
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develop unique well specified and low-cost products for them and cater them properly according
to their demands. Focus strategy will support JD to build up strong trust and loyalty among its
customers and utilizing this plan appropriately will make JD’s particular market less fascinating
to its rival organizations (Meadows, 2017). This strategy is not usually enough on its own so, it is
necessary for JD to decide whether it will pursue cost leadership or cost differentiation once it
has selected this strategy as its major approach. So if the organization chose cost focus then it has
to seek price benefits in its targeted segment and if it selects differentiation focus it has to look
up contrast in its target market of Vietnam. These both focus strategy variants rest on the
differences of the JD’s segment of target and other parts of the Asian industry. Strategy of cost
focus will exploit specialities in the behaviour of prices while the differentiation focus will
explore the special requirements of buyers in certain segments of Vietnam. JD has to accept the
harshness of differentiate focus in a mature marketplace. So, before making any decisions on this
approach it is necessary for the company to investigate the products and consumer feedbacks of
its competitors.
Selecting the appropriate generic strategy
JD’s choice of pursuing which generic strategy will underpin every another decision
related to business strategy it makes. So, it’s really worthy to spend valuable time to get right
returns. It is the valuable thing JD needs to do that to make every strategy work on various
peoples of markets. After looking the overall strategies it is cleared that the cost leadership
strategy needs complete concentration on the processes and differentiation demands on highly
creative approach and outward facing. It is vital to measure strengths and competences of JD
when selecting these three strategies in the process of expansion and diversification.
Strategic recommendations for JD sports PLC to strengthen its existing position
Firstly founder of the organization has to take out time and build some organizational
strategies on their level and divide them into three categories: functional, corporate and business
level strategy.
Strategic planning can improve performances of JD by streamlining the operations of it
and leveraging resources exactly the way it needs to be and to optimize the time management
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process that empowers the company to reach its potential and grow its strengths while obtaining
its aims and objectives.
Some basic recommendations for JD are: it has to plan actual design and structure of the
business, pattern it, position its business in the scales of economy, prepare some perspectives that
make it unique from the other performers in the country and ploy according the prepared
strategy. These five elements will allow JD to implement various kind of effective strategies that
will fulfil it expected aims in the future and will includes different facets and concerns related to
the durability and reputation of the company. JD has to do realignment and administrative
consolidation by the perspectives of its vision and mission and prepare programs, consolidate
and minimize bureaucracy in the company. It has to keep concentration, extending businesses by
diversifications, making profits by inaugurating new concepts of work, do investigations online
for the most require products in the markets nationally and internally to be durable and achieve
long term sustainability.
Strategic direction
Markets
JD sports focuses on selecting market which have high number of consumers such as
expansion in Asia (Vietnam) highly be profitable for firm which help in improving market
position globally. There are large numbers of suppliers available in Asian countries which help
in following competitive strategy and can impact on business of firm. Malaysia, Vietnam have
large number of population which attracted towards sports clothes which helps in increasing
market share in time of globalization. It also follows market development strategy which can be
highly profitable for firm and hence support business of company.
Product & Services
JD sports sales range of product & services which helps in attracting customers and it
also support on stop shopping habit of customers. Adopting effective supply chain management
strategy in Asia that is Vietnam can highly be profitable for firm (Evans, 2017). Advance
technology can again help in improving efficiency; quality and productivity of work which
support innovation and creativity of organization. Firm has to focus on taste and trend of buyer’s
which helps firm in gaining competitive advantage in time of globalization. Marketing team of
organisation must analysis demand of customers in Asia which can help in providing right
product on time and increase profit of JD sports.
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CONCLUSION
This above report concludes that a business need exact management of strategic
environment to survive in the existing markets and for expanding business according the
demands. It is also concluded in this report that JD sports PLC has to go through some analysis
and frameworks to identify its external factors that can harm it and in order to gain knowledge
related to manage strategic performances and prepare relevant structure of the business to serve
long term in the economically developed countries to be sustainable and maintain accountability.
This report concludes all the analysis and evaluations are vital for JD to perform and applied in
its strategic management.
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REFERENCES
Books and Journals
Aldous, R. and Soares, A., 2020. Ethical purchasing behaviour in retail: Food versus clothes.
Journal of Research Studies in Business and Management, 3.
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research: insights from relationship marketing. International Journal of retail &
distribution management.
Dibia, P.C., 2019. Examining the lean management approach to counter fraud: a case study of
the way a lean retail organisation manages incidents of fraudulent refund claims
(Doctoral dissertation, University of Portsmouth).
Evans, N.N., 2017. The internationalisation strategies of small and medium-sized enterprises
(SMEs) clothing suppliers in the UK (Doctoral dissertation, Manchester Metropolitan
University).
Goworek, H and et.al., 2018. Managing sustainability in the fashion business: Challenges in
product development for clothing longevity in the UK. Journal of Business Research.
Islami, X., Mustafa, N. and Latkovikj, M.T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal. 6(1), p.3.
Kharub, M., Mor, R.S. and Sharma, R., 2019. The relationship between cost leadership
competitive strategy and firm performance. Journal of Manufacturing Technology
Management.
Kumar, V. and Pansari, A., 2016. Competitive advantage through engagement. Journal of
marketing research. 53(4). pp.497-514.
Kurt, A. and Zehir, C., 2016. The relationship between cost leadership strategy, total quality
management applications and financial performance.
Littlechild, S., 2016. Contrasting developments in UK energy regulation: retail policy and
consumer engagement. Economic Affairs.36.(2).p.118-132.
Meadows, M., 2017. The Ultimate Focus Strategy: How to Set the Right Goals, Develop
Powerful Focus, Stick to the Process, and Achieve Success. Meadows Publishing.
Nash, J., 2019. Exploring how social media platforms influence fashion consumer decisions in
the UK retail sector. Journal of Fashion Marketing and Management: An International
Journal.
RAZIF, M.S.B.M., 2018. SPORT ONLINE SHOPPING.
ROZENFELD, G.C., 2017. CHAPTER FOUR DISSIDENT OPINIONS ON BUDGETARY
CONTROL SYSTEMS IN THE 21ST CENTURY: EVIDENCE FROM A
MULTINATIONAL RETAIL ORGANISATION LOCATED IN THE UK. Dissident
Voices in Europe? Past, Present and Future.41.
Semuel, H., Siagian, H. and Octavia, S., 2017. The effect of leadership and innovation on
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